Are tips included in the calculation of Gross Sales for a Crave Cookies franchise?
Crave_Cookies Franchise · 2025 FDDAnswer from 2025 FDD Document
- "Gross Sales" is defined in our franchise agreement as the total dollar amount of all sales generated through your business for a given period, including, but not limited to, payment for any services or products sold by you, whether for cash or credit. Gross Sales does not include (i) tips, (ii) sales taxes collected, (iii) sales of prepaid cards or similar products (but the redemption of any such card or product will be included in Gross Sales). If Crave Cookies Franchising, LLC requires or approves Franchisee's use of a third-party delivery service, Gross Sales on deliveries will be calculated on the amount paid by the customer to the delivery service (not counting any delivery fee, service charge, or gratuity paid by the customer), rather than the amount paid by the delivery service to Franchisee. Please see your state-specific addendum for more information.
Source: Item 6 — OTHER FEES (FDD pages 11–15)
What This Means (2025 FDD)
According to Crave Cookies's 2025 Franchise Disclosure Document, tips are explicitly excluded from the calculation of Gross Sales. Gross Sales is a critical figure because several fees, including the royalty fee (6% of gross sales) and the marketing fund contribution (2% of gross sales), are calculated as a percentage of this amount.
For a Crave Cookies franchisee, this means that while all sales of products and services, whether paid in cash or credit, contribute to Gross Sales, any tips received by the business do not. This exclusion can be beneficial for franchisees as it lowers the base amount upon which royalty and marketing fees are calculated, potentially reducing these expenses.
Additionally, the FDD specifies how Gross Sales are calculated when third-party delivery services are involved. In such cases, Gross Sales are based on the amount the customer pays to the delivery service, excluding any delivery fees, service charges, or gratuities, rather than the amount the delivery service remits to the franchisee. This clarification ensures consistency in Gross Sales calculations across all sales channels. Franchisees should be aware of these specific inclusions and exclusions to accurately report their Gross Sales and avoid discrepancies with Crave Cookies Franchising, LLC.